Japan's Nikkei fell 0.8% as chip stocks retreated

Japan's Nikkei 225 fell 0.8% on Thursday as semiconductor shares declined and investors weighed artificial intelligence spending into 2027. The broader Topix was largely unchanged, as gains in services and other technology shares limited the wider market's decline.

Nikkei fell to 64,128.54 by 7:07 AM IST

Nikkei 225 data placed the index at 64,128.54 by 7:07 AM IST on Thursday. The 0.8% fall came after the index had risen 0.9% on Wednesday.

Topix data showed the broader index was largely unchanged on Thursday after it had advanced 0.9% in the previous session.

Tokyo Electron fell 4.1% as other chip shares also declined

Tokyo Electron fell 4.1% and ranked among the biggest drags on the Nikkei because of its heavy weighting in the index, Nikkei 225 data showed. Screen Holdings dropped 6% and Lasertec declined 2.7%, according to Japanese market data.

Fujikura lost 3% and SoftBank Group slipped 3.1%. SoftBank Group is an investor in artificial intelligence-focused start-ups, the market account said.

Trend Micro gained 6.6% after critical vulnerabilities in the PHP programming language were disclosed and several European governments took their websites offline as a precaution. SHIFT, an IT services provider, rose 9%, while IT consultancy BayCurrent advanced 5.9%. Sony increased 2.6%, Japanese market data showed.

The 2.2% rise in the services industry group placed it ahead of the other 32 groups tracked by the Tokyo Stock Exchange, which reported data for 33 industry groups.

Investors weighed artificial intelligence spending into 2027

Japanese market data showed investors were assessing the outlook for artificial intelligence-related spending in 2027. Concerns about the sustainability of artificial intelligence capital expenditure affected semiconductor shares despite broadly solid earnings from Lam Research.

Lam Research shares fell in extended trading. Concerns about demand from China added to caution around semiconductor equipment demand, according to the market data.

The different moves in semiconductor and other technology shares showed a more selective approach to artificial intelligence-related stocks as investors assessed future spending on infrastructure and computing capacity.